Battle for loyalty intensifies

By Julian Lee

WOOLWORTHS raised the stakes in the battle for customer loyalty yesterday when it revealed details of its tie-up with the Qantas Frequent Flyer program, promising increased sales and no ongoing costs.

Later this month the 3 million shoppers who use Woolworths' Everyday Rewards card can earn a flyer point for every dollar spent above $30 in one transaction. The 4¢-a-litre discount remains unaffected.

The program will include the company's other brands, Big W, liquor chain BWS and electronics retailer Dick Smith.

Eventually motorists filling up at service stations operating under the joint venture with Caltex will be able to earn points, though the rate has yet to be worked out.

Woolworths general manager of customer engagement Richard Umbers said the scheme would pay for itself.

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"More people will choose to shop with us in preference to the competition and as a reward for that we will be able to give them something back," he said. "It is not an additional cost to the business."

Both companies expect a rise in membership of their respective schemes, greater loyalty and inevitably a higher share of sales. Qantas predicts membership of its frequent flyer scheme to rise from 5.6 million to at least 7 million in the first year.

The decision to waive the $82.50 joining fee is a likely trigger; Qantas expects two out of three Everyday Rewards cardholders to sign up.

Loyalty marketing expert Mike Ebstein of MWE Consulting said the partnership made "good commercial sense". "For Woolworths, it gives them access to a large consumer group of which it must be presumed a significant proportion will not be regular shoppers at Woolworths outlets," he said.